The rise in food prices continues, the increase in the price of some products already reaches 98%, as calculated by the Latvian Traders’ Association (LTA), which regularly compares the prices of consumer goods in stores.
The association calculates the average prices in the price tags shown in the stores of retail companies, without calculating the share prices set by the manufacturers.
LTA reported that in the dairy group, compared to December last year, there is a price increase for all products, the biggest increase is for kefir, which has become more expensive on average by 37%. The price of milk and cream increased by 21%. The prices of cheese, butter, ricotta, sweet cream increased by 12-14%. Only the price of “Kārums” cottage cheese remained unchanged – 0.38 cents on average. The price of eggs has increased by an average of 51% and it is now possible to buy 10 M size eggs in stores for € 2.54 instead of the previous € 1.69.
For meat products, the price of sausages and hot dogs increased by 12-17% over the same period, while the price of chicken and broilers increased by 26%, up to € 3.97 per kilogram. . The smallest increase – 3% – for anchovies.
In the bread and cereal products category, the average price of white bread in March of this year was € 1.01, in December 2021 it was € 0.57, an increase of 77%. The price of wholemeal bread has risen much less, by 14%. The average price of oatmeal has increased by 39%, buckwheat is now 25% more expensive. The price of rice has decreased and now you have to pay 1.79 euros per kilogram, while in December -2.69 euros. Pasta and peas have also gotten cheaper.
Compared to December 2021, the salt recorded the greatest price increase: instead of the previous 0.56 euros, in March it cost 1.11 euros. Semolina also has a significant increase – by 74%. However, the price of sugar only increased by 8%.
The prices of fruits and vegetables are the friendliest. In this group the prices of almost all of the most popular have decreased or remained unchanged. The only increases are for bananas and tomatoes, which are popular in price wars. Only oil prices increased – rapeseed by 24%, sunflower – by 14%.
LTA chairman Henrik Danusevic says the impact of the Russian-Ukrainian war on the economy in general can be described as stagflation. This means lower economic growth and higher inflation. These are negative effects, of course, but some sectors, including food, could recover in the short term. “The sanctions against Russia mean the almost complete isolation of the participants in the trade in goods and capital in many different ways. Due to sanctions, the falling value of the ruble and a possible recession, Russia is effectively disappearing as a trading partner of European countries. A similar situation will be with Ukraine as trading partner, because war with all its consequences is likely to reduce trade. A ban on grain exports is already in place. Rising prices of fuel is a major blow to Europe and it is difficult to say how the current crisis will affect the European energy transition project. It is likely to slow it down in the short term and accelerate it significantly in the long term. The influx of refugees does not have a clear economic picture impact: in the short term, it is related to the increase in public spending and the contextual development of some groups of companies and the increase in poorer families, as well as a wider supply in the labor market. was previously accepted. The growth at the start of the year was probably higher than previously estimated, however the average growth forecast was reduced to 3%. At the same time, inflation will rise, peaking in a few months “, comments H. Danusevičs.
He goes on to say that the possible second-order effects of rising fuel prices (no indirect tax cuts) as well as the new wave of energy (gas, electricity) price increases increase inflation. “We do not know the peak of oil prices (negotiations to lift the embargo on Iranian oil imports have been accelerated). However, average inflation in 2022 will rise to 8.4% with a peak of 9.5 % in May-June. The war between Russia and Ukraine will exacerbate the already high pressure on food prices, but this effect will not be a rapid and abrupt price increase, but will “widen” in the coming months. agricultural production due to rising gas prices, which will also be reflected in the further increase in nitrogen fertilizer prices. There are also sectors where the influx of refugees from Ukraine could temporarily have a positive effect on demand, mainly industries producing essential goods, such as food, beverages, textiles, tobacco or even pharmaceuticals. According to Nielsen data, the war has greatly increased the demand for pasta, rice and preserves. Current events geopolitics are changing consumer behavior. At the same time, the increase in demand is not as high as at the beginning of the pandemic. the complaint is linked to concerns caused by the outbreak of war and the possible threat of war on Latvia. Shoppers worry that some items may not be on the shelves and when they see that they are out of stock because others are buying them, they go shopping for themselves. The rise in food prices is influenced by the rise in the price of wheat on world markets, as well as in the price of flour. In addition, there is an increase in the prices of fuel, higher and higher prices of energy, sheets, paper and other components, which affect the final price of the goods in the store. So this year we can forget about cheap food, “says the president of LTA.
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